McLean, Va. (

TheStreet

) -- Shares of

Capital One Financial

(COF) - Get Report

were up 2%, to $42.17, in early trading Friday, following an analyst upgrade.

Saying that consensus earnings estimates for the company were too low, Scott Valentin of

FBR Capital Markets

(FBCM)

upgraded his rating for Capital One to a buy with a price target of $53, which would be a 28% increase from Thursday's closing price of $41.27.

Despite the upgrade, Valentin lowered his earnings estimate for 2011 to $5.30 a share from $5.60 and his 2012 earnings estimate to $5.20 from $5.25, saying that Capital One would slow its release of loan loss reserves.

Even after being lowered, Valentin's earnings estimates for Capital One were considerably higher than the consensus estimates among analysts polled by Thomson Reuters, which were $4.70 a share for 2011 and $4.99 for 2012. The analyst said that the consensus estimates "should increase over the next several quarters."

Based on Valentin's earnings estimate for 2011, Capital One's shares were trading at a low eight times forward earnings, "a discount to its five-year median P/E ratio of 10.5," according to the analyst.

RELATED STORIES:

General Electric Raises Dividend >>

Banks Try to Understand the Unbanked >>

--

Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here:

Philip van Doorn

.

To follow the writer on Twitter, go to

http://twitter.com/PhilipvanDoorn

.

To submit a news tip, send an email to:

tips@thestreet.com

.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.